December 11, 2018

Kenya ranked third in Africa’s private equity chart

Nairobi City. Photo NMG

Kenya has been ranked the third most attractive African market for private equity (PE) funding, indicating the huge promise in East Africa’s largest economy despite multiple challenges arising from a recent pile-up of public debt.

Consultancy EY (Ernst & Young) says in a report that is expected to be published today (Monday) that Kenya’s fast-growing technology sector, nicknamed “Silicon Savannah”, drew the most foreign investor interest, supported by an improved business environment.

“FDI [foreign direct investment] projects in Kenya increased by 44 per cent compared with 2016,” says the Turning Tides, Africa Attractiveness October 2018 report.

The increase, the report says, was “largely because of a conducive environment, including a pool of well-resourced IT developers and a high smartphone penetration rate.”

South Africa and Morocco are ranked as Africa’s top hotspots for PE deals ahead of Kenya, which beat Nigeria, Ethiopia, and Egypt – the number four, five and six respectively.

The report says Kenya’s top ranking has benefited from recent government’s action to make the country a viable and competitive technology hub through the formulation of policies to drive the initiative.

The country’s performance is described as significant given that 2017 was dominated by election-related investor jitters.

Kenya’s economy grew 4.9 percent in 2017, its lowest rate in five years, under the weight of a prolonged electoral process and adverse weather.

Business Daily

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